Medicare Physician Fee Schedule Final Rule

The Medicare Physician Fee Schedule Final Rule for Calendar Year 2021 was published in the Federal Register on December 28, 2020. This Final Rule went into effect on January 1, 2021 and implemented the following changes:

  • Streamlined the reporting process for office and outpatient evaluation and management (E/M) services and increased the relative value units (RVU) for E/M services. The new Physician Fee Schedule provided significant increases in RVUs for common office and outpatient E/M services such as maternity care bundles, emergency room visits, end-stage renal disease capitated payment bundles and therapy evaluation services. The goal is to reduce billing and coding burdens on physicians and reimburse time spent evaluating and managing a patient’s care.
  • Expanded the list of covered telehealth services specific to the PHE and makes permanent certain codes that were only temporarily added since the onset of the PHE and created a new category (Category 3) of telehealth codes on a temporary basis to the approved list of Part B telehealth codes that will be covered for the duration of the PHE.
  • CMS acknowledged the importance of vaccinations to the public health and proposed increasing payment for vaccinations. On March 15, 2021, CMS increased the Medicare payment for COVID-19 vaccine from about $45 to $80 for a single dose of the vaccine and a payment rate of $80 for the vaccine requiring two doses.  The new and higher payment rate is designed to increase the number of vaccines providers can furnish each day. Vaccine providers are prohibited from charging patients any amount for this vaccine administration as a condition of receiving free COVID-19 vaccines.

Consolidated Appropriations Act

Signed by President Trump on December 27, 2020, this legislation includes the following provisions important to hospitals and health systems.

  • Provider Relief Funds – allows providers to calculate lost revenues using “any reasonable method” for the calculation that include the difference between budgeted and actual revenue if such budget had been established and approved prior to March 27, 2020.
  • Provides a 3.75% increase in payments un the Physician Fee Schedule for 2021.
  • Eliminated the Medicare sequester cuts for the first three months of 2021.
  • Lifts the cap on Medicare-funded physician residency positions in teaching hospitals by 1,000, effective in FY2023.
  • Includes $30 billion for the purchase and administration of COVID-10 vaccines and related therapeutics.
  • Protects patients from surprise medical billing that arise from out-of-network emergency care provided at in-network facilities without the patient’s informed consent (effective 1/1/2022).
  • RHC payments – increases the Medicare cap for independent rural health clinics to $100 beginning on 4/1/2021 and gradually increases the upper limit each year through 2028 until the cap reaches $190. Provider-based RHCs which are provider-based to hospitals with fewer than 50 beds and certified after 12/31/19 also will now be subject to a cap to their reimbursement.  For the provider-based clinics approved prior to 12/31/19, they will have a clinic-specific cap established based on their 2020 all-inclusive rate that will grow annually at the Medicare Economic Index.

Dan Schoenbaechler, CPA, FHFMA
Healthcare Consulting Manager • 502.566.1097